Microsoft Corp. has agreed to a $14-million settlement to resolve claims by the California Civil Rights Department that the company illegally penalized employees for taking medical or family-care leave.
The agreement was announced by the agency on Wednesday, Reuters reported.
The California Civil Rights Department accused Microsoft of retaliating against California-based employees who took parental, disability, pregnancy, or family-care leave since 2017.
The department's filings in state court alleged that these employees, many of whom were women and people with disabilities, were unfairly denied raises, promotions, and stock awards.
These workers received lower performance-review scores, negatively impacting their pay, career progression, and overall career trajectory, the filing said.
The settlement, which is pending approval by a state judge, concludes a lengthy investigation by the Civil Rights Department.
The agency accused Microsoft of sex and disability discrimination and interfering with employees' rights to take leave.
While the exact number of affected workers remains unclear, Microsoft employs approximately 6,700 people in California.
Kevin Kish, director of the Civil Rights Department, said Microsoft failed to support employees needing time for self-care or family responsibilities.
"The settlement announced today will provide direct relief to impacted workers and safeguard against future discrimination at the company," Kish stated.
Microsoft has denied any wrongdoing.
A company spokesperson said: "Microsoft is committed to an environment that empowers our employees to take leave when needed and provides the flexibility and support necessary for them to thrive professionally and personally."
In addition to the $14 million payout, Microsoft has agreed to hire an independent consultant to ensure non-discriminatory company policies regarding leave.
The company will also enhance its procedures for employees to raise complaints and provide training for managers and human resources personnel to prevent future issues.
Most of the settlement money will be allocated to affected workers. Eligible employees are those who worked at Microsoft from May 13, 2017, to the date of court approval for the settlement and who took at least one leave protected under state or federal law.
Each qualifying employee will receive a base payment of $1,500, with additional compensation based on factors such as salary and length of employment.
The settlement is part of a broader series of large agreements the Civil Rights Department has secured in recent years, mostly concerning sex-discrimination cases.
Notable settlements include a $100 million deal with Riot Games in 2021, a $54 million settlement with Activision Blizzard last year, and a $15 million settlement with Snap last month.
